When Hank Paulson scared Congress into passing the Troubled Asset Relief Plan (TARP) last fall, he said that it would be used to buy toxic waste from banks. That never happened. All we know is that $350 billion of our taxpayer money is gone and that most of it went to banks and a bit to the auto industry. What are they doing with our money? How is the government measuring the success of TARP? Is it helping? Until we get those answers, we should not allow more good money to be thrown after bad.
What we have now is a bunch of talk. Sen. Kent Conrad (D-ND) said "Without the first TARP, we may have a Dow at 4,000 right now and the economy in an absolutely free fall." Thanks Kent -- I'd like to see your proof for that claim. Why not Dow 400? Progress on finding out what happened to the money is coming from Sen. Carl Levin (D-MI) who got Treasury to cough up contracts between the government and 10 financial institutions -- by threatening a subpoena.
It is unbelievable that basic information about what happened to $350 billion in our money has to come from a Senator threatening legal action against the Treasury. Meanwhile, President-elect Obama is pushing for the next $350 billion to be available when he takes office. I share Obama's disappointment "with the absence of clarity, the lack of transparency, the failure to track how the money's been spent and the failure to take bold action with respect to areas like housing, consumer credit, so that we can maintain credit."
I hope Obama can do a better job with the next $350 billion and I'd like to see exactly how he plans to do it.
Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. Portfolio published his eighth book, You Can't Order Change: Lessons From Jim McNerney's Turnaround at Boeing on December 26, 2008.
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Reader Comments (Page 1 of 1)
1-13-2009 @ 11:12AM
BHarrison said...
It is past time for Congress to demand and require that all of the $350 Billion "bailout" monies be accounted for by the FIs. To not do so would be unconscionable and tantamount to another FRAUD against the American people. George Bush garnered support for the implementation of the war against Iraq by use of a lot of fabricated and manipulated "propaganda of fear" . . . and Paulson did the same thing with the "propaganda of fear" to get the first 50% of the bailout monies distributed. There MUST be an accounting for these monies.